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Musings Report 2020-38 9-19-20 What Happens Next?
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For those who are new to the Musings reports: they're a glimpse into my notebook, the unfiltered swamp where I organize future themes, sort through the dozens of stories and links submitted by readers, refine my own research and start connecting dots which appear later in the blog or in my books. As always, I hope the Musings spark new appraisals and insights. Thank you for supporting the site and for inviting me into your circle of correspondents.
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What Happens Next?
There's a general sense that whatever happens next will be consequential.
The mainstream view is that the "normal" of 2019 will soon be restored. (Never mind that beneath the surface many things were already unraveling in 2019.)
A vaccine will be discovered, tested and made available to hundreds of millions of people, restoring global trade, travel and tourism.
The feared "second wave" of Covid-19 will not arise, the U.S. presidential election will go off without a hitch and weather extremes will moderate.
Businesses will reopen, civil disorder will dissipate, millions will return to work and technologies activated by the pandemic will continue to boom. Global markets will move from strength to strength as profits surge.
This is the happy story that the mainstream media and authorities are duty-bound to promote, as the psychology of caution and uncertainty is deadly to the borrow-and-spend mentality the global economy depends on as its life blood.
Or all this is pure fantasy and we awake to a recognition that the past six months has been a strange mix of denial and honeymoon, a suspension of reality in favor of a "hope for the best" faith in large-scale, centrally managed fixes.
To a realist, none of the happy story is remotely plausible.
If a vaccine is rushed into approval, few will trust it. If it turns out the vaccine is only 70% effective, as per informed estimates, even fewer will trust it. If there are any side effects of any kind, fewer still will trust it. If even one person who took it dies, doubts about the "official" promotion of the vaccine as safe will soar. If it turns out the vaccine is only effective for a few months, the dream of permanent protection will die. If the government tries to impose it, resistance will arise.
Skepticism and distrust of self-serving authorities and experts are ubiquitous, and the genies of distrust and wariness cannot be forced back into the bottle.
This paper conclusively links infection rates with Vitamin D deficiencies. As days shorten and winter temperatures push people inside, Vitamin D deficiencies increase. This is why a second wave in the northern hemisphere is already baked in. The link between vitamin D deficiency and Covid-19 in a large population (via Dave P.)
As for Covid-19 being "no worse than the flu," I've listed a few links in From Left Field that provide evidence of long-term organ damage and the potential for disability in between 10% and 50% of those who get the disease--possibly even asymptomatically.
As noted in Musings #36, occurrences of long-term damage are not even being routinely tracked by authorities; without any large-scale data being collected, we know essentially nothing about the rates of organ damage, the typical duration of damage, and so on.
If we have no broad-based data, then authorities are making policy while blind-folded. Is this the way to achieve good results? No.
A great many people will be shocked that Covid-19 isn't a hoax, isn't cured, and isn't going away, because that's what their denial-honeymoon led them to believe.
As for the economy, the second and much more permanent wave of lay-offs and downsizing is just beginning.
In the denial-honeymoon phase, small businesses tried to re-open. As autumn fades into winter, they'll realize they can't make enough money to keep the doors open, much less make a living. They will close forever.
Corporations with exposure to the fatally wounded industries--air travel, tourism, retail-office commercial space--will have to lay off employees as their revenues don't bounce back as expected.
Bankruptcies, foreclosures and defaults will soar as borrowers cave in to reality and lenders are forced to start booking the losses. This is a self-reinforcing feedback loop, as defaults and foreclosures lower property values, triggering more foreclosures and so on.
Real estate is currently surging in a mania of buying by the mobile wealthy. ("A little place in Napa Valley for only $3.75 million? We'll take it!") Once this wave of mania fades, longer term trends will become clearer.
Extremes of weather, deterioration of city services and amenities and a variety of economic and social factors are likely to drive migrations, whether by choice or necessity.
This is a long article but worth a careful read. How Climate Migration Will Reshape America: Millions will be displaced. Where will they go?
The author is looking only at environmental data, and so he concludes people will move into cities--either already overcrowded metro areas or Rust Belt cities with ample transportation and fresh water capacity.
The economic realities are not positive for most cities. Cities are extremely costly to maintain and require enormous inflows of tax revenues and capital. San Francisco, a city of about 880,000 residents, has a budget of $12.3 billion, larger than some states and more populous counties.
The city's budget deficit is estimated at $1.7 billion, very likely a gross underestimate based on overly rosy projections of soon-to-rebound tax revenues.
It wasn't that long ago that the city's entire budget was $1.7 billion. Now that is the deficit.
Cities with declining tax revenues cannot support services and amenities at anything close to current levels. An increasing percentage of every city, county and state budget will be devoted to pension and healthcare plans promised to municipal retirees and debt service.
At some point all the tax revenues will be spoken for by these legacy expenses, so there will be no money for services. This seems "impossible," but like the sinking of the Titanic, it was "impossible" until it became inevitable.
Cities are expensive and so there has to be a surplus of well-paying jobs to support commerce and taxes. Tax revenues depend not on low-paying service jobs but on high-paying jobs and free-spending wealthy people. If the high-paying jobs diminish and the wealthy reduce their spending, cities suffocate from a lack of money.
As I've endeavored to explain, the financial fragilities of over-leverage, over-indebtedness and over-speculation have been increasing for the past decade. The free-for-alls of financialization and globalization have reached extremes and now the pendulum is swinging back. Every day the pendulum gathers momentum--socially, politically, financially and economically. It reached such extremes that the eventual extreme on the other side will far exceed conventional expectations.
One final dynamic is luck. In so many ways, the global economy has been extraordinarily lucky for the past 20 years: extraordinarily lucky that increasingly marginal land has produced agricultural surpluses like clockwork, and fracking and other technologies have extended the illusion that petroleum fuels will always be cheap and abundant--at least until electricity is "nearly free" in "near-infinite" quantities. (That's the promise of green-energy gurus, none of whom actually work in the industry.)
Our luck is finally running out, and few are prepared for a biblical 7 lean years. This could include an existential crisis in which all the financial artifices and phantom wealth evaporate and all that was unsustainable unravels. This could include the end of surpluses in energy and food that the world has long considered permanent. "Growth" may be constrained by real world limits that neither technology nor money-printing can overcome.
My projection is that the six month period we're exiting, from April 1 to September, 30 will in the future be viewed as the denial-honeymoon stage in which all good things seemed not just possible but almost inevitable: technology would conquer the virus, and all we needed to do was print trillions of dollars to tide us over until technology won a complete victory over everything: the virus, the economy, even the Earth itself.
This is an extreme of hubris that literally begs for a grand comeuppance, and I suspect the following six months from October 1 to March 31 will astound us with an unexpected confluence of political, social, financial, political and environmental unraveling.
In the denial-honeymoon stage, the financial pendulum was pushed to new and highly unstable extremes. The pendulum will swing back to extremes few anticipate in the six months from October to March.
I doubt most of the "worst case scenarios" conjured up in the denial-honeymoon stage will do any justice to the real-world events just ahead.
What happens next? No one knows, but extremes don't just revert to the mean, they overshoot. This includes not just debt and speculative mania but artifice, hubris, karma and luck. Twenty years of extraordinarily good luck could revert to extremes of bad luck most would declare as "impossible" as the Titanic sinking.
Right now few expect anything other than a return to "normal." Maybe our luck will hold and the gods will ignore our incredibly hubristic faith in technological magic and money-printing. But it may be wise to consider a much broader range of "worst case scenarios" and ponder what our options might be in those scenarios.
Maybe the happy story narrative plays out exactly to script. But it's cheap preparation to think through our options if the pendulum reverses, our luck runs out and seven lean years loom large.
The vast majority of people have been trained to expect some large-scale, centrally managed "fix" that they can passively benefit from. If there are no large-scale "fixes," then the "fixes" will have to be ones we make ourselves.
Highlights of the Blog
Podcasts:
AxisOfEasy Salon #22: When the going gets weird, the weird turn to YouTube check out the list of sources... we cover a lot of ground in this one.
posts:
"Inflation" and America's Accelerating Class War 9/18/20
This Is Why Inflation Will Rip Everyone's Face Off 9/17/20
Sacrifice for Thee But None For Me 9/16/20
Isn't It Obvious We Need a New System? 9/15/20
The Four D's That Define the Future 9/14/20
Best Thing That Happened To Me This Week
Had a chance to review a draft of a book describing a low-cost, highly efficient solar/electric appropriate-technology by long-time correspondent Marvin M. Marvin's innovations are exciting because they show the potential for low-cost technologies and social-behavioral changes to greatly improve the well-being of people without access to any electrical grid. As a bonus, these small systems are ideal for developed-world DIYers who want to bypass the costly, wasteful solar arrays, batteries and inverters of conventional systems. It was good to be able to do a small thing for a fellow author who has always supported my work.
From Left Field
ON LONG-TERM COVID DAMAGE / DISABILITY
Symptom Duration and Risk Factors for Delayed Return to Usual Health Among Outpatients with COVID-19 (CDC)
Op-Ed: People ask me if I’ve recovered from COVID-19. That’s not an easy question to answer
Persistent Symptoms in Patients After Acute COVID-19 (Italy)
COVID-19 Can Wreck Your Heart, Even if You Haven’t Had Any Symptoms: A growing body of research is raising concerns about the cardiac consequences of the coronavirus (Scientific American)
High odds severe Covid-19 can lead to kidney injury or failure, medical studies reveal
Neurologic manifestations in hospitalized patients with COVID-19
Italy’s Bergamo is calling back coronavirus survivors. About half say they haven’t fully recovered.
Covid-19 Long Haulers Twitter thread. This is by a doctor who treated hundreds of Covid-19 patients in New York.
NON-COVID LINKS
The Top 1% of Americans Have Taken $50 Trillion From the Bottom 90% – And That’s Made the U.S. Less Secure. -- it's remarkable that such an inflammatory story is in the mainstream now...
Remember Peak Oil? BP Says It's Coming: But it's not about supply, it's about demand. -- but it's also about supply; the cheap, easy-to-get stuff is long gone...
Four Reasons Civilization Won’t Decline: It Will Collapse. -- well-reasoned doom and gloom...
Climate crisis 233 million years ago reshaped life on Earth, say scientists.
The Raw Material Challenges Facing the Energy Transition from Oil to Minerals (1 hr) -- not easy or cheap to dig up and process all that lithium and then recycle it all...
"Forgiveness is giving up all hope of a better past." - Jack Kornfield (via Michael K.)
Thanks for reading--
charles |
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